Today's Must Read
Amid End Market Weakness, Global Presence Aid Eaton (ETN)
Manulife Financial (MFC) Asia Business Aids, Expenses High
Wednesday, March 4, 2020
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including BP p.l.c. (BP), Eaton (ETN) and Manulife Financial (MFC). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
BP’s shares have outperformed the Zacks International Integrated Oil industry over the past six months (-14.6% vs. +21%). The Zacks analyst believes that all the key projects BP has been delivering over the years has backed the company to post record production levels.
Notably, the projects that were placed into production will not only help fetch significant cash flows but will also boost production by 900 thousand barrel of oil equivalent per day (MBOE/D) by 2021. BP has also been committed toward returning capital to shareholders through dividend payments and share buybacks.
However, although the energy giant cleared $1 billion of net debt in the December quarter of 2019, the company’s debt load is significantly higher than its peers. A weak crude oil pricing scenario is also affecting the firm’s bottom line.
Shares of Eaton have gained +17.2% over the past year against the Zacks Electrical Machinery industry’s rise of +1.4%. The Zacks analyst believes that Eaton’s wide market reach, strategic acquisitions, spin-off of less profitable businesses are boosting operations.
The company’s ongoing R&D investments will help it upgrade products, and provide better electrical solutions to customers. Eaton’s divestment of the Lighting and Hydraulics business to focus on core operations is in sync with long-term growth objectives.
Strong cash flow generation and product innovation are likely to drive its performance. However, Eaton’s world-wide operations expose it to negative currency translation, cyber-attacks and security breaches, all of which might impact operations. Choppy end-market conditions have compelled the company to lower organic growth projection and trim earnings expectation.
Manulife’s shares have lost -11.4% over the past three months against the Zacks Life Insurance industry’s fall of -9.2%. The Zacks analyst believes that Manulife is well positioned to achieve its target of $1 billion of expense efficiencies by 2022 and remains confident of delivering 10% to 12% core EPS growth over the medium term.
Manulife Financial’s fourth quarter earnings of $1.1 billion (C$1.5 billion) improved 22.2% year over year. This upside can be attributed to in-force and new business growth in the United States, Hong Kong and Asia Other, and progress in Global Wealth and Asset Management.
It continues to witness new business volumes, particularly in Asia, and positive net flows in its wealth and asset management businesses. The company is expected to gain strong hold over Asian markets. It maintains a strong capital position and remains focused on improving its leverage ratio.
Other noteworthy reports we are featuring today include IQVIA Holdings (IQV), Cardinal Health (CAH) and Regions Financial (RF).
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Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>